Fonterra has completed the sale of 3 Chinese dairy farms. 2 agricultural hubs in Ying and Yutain have been sold to Inner Mongolia Youran Dairy Co (Youran). The sale of these companies, announced in October, was still pending approval from the Chinese government. It has given the green light since April 1.
Fonterra also sold the 85% stake in the Hangu farm to Beijing Sanyuan Venture Capital (Sanyuan), which also already owned 15%. The 3 companies are being sold for a total of US$385 million. “Now is the time to pass ownership of the companies to Youran and Sanyuan for the next stage of development,” said Miles Hurrel, CEO of Fonterra, in a statement.
Fonterra remains focused on Asia
The Chinese dairy market continues to develop and Fonterra wants to innovate in this by focusing on creating new products from the New Zealand milk flow. This means Fonterra remains an important exporter of milk to China. Hurrel says that as an exporter they want to maintain good relations with their customers.
According to Hurrel, trade with China is clearly reflected in the financial results. This is mainly due to the strong demand for New Zealand dairy products such as whole milk powder. As a result, Fonterra has many opportunities for growth in Chinese dairy exports in the coming years.
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